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Why Buy Gold?
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Why buy gold? Why not marbles, sports cards or antiques? The answer is simple. There is nothing else, with the exception of other precious metals, that has a guaranteed value. With gold you can basically sell it at spot price anywhere in the world. There is no waiting for someone to buy, you can sell it on demand.

Guaranteed Value

If I offered a 1 ounce gold coin to a dealer or investor in Ney York, London or Moscow I would receive the same price from any one of them. They would all pay the current spot value, no questions ask. If I had any other product I'd have to advertise it for sale and wait until someone buys it. And it may never even sell. So thats the common sense reason to invest in gold.

Preserves Wealth

Another good answer to the question why buy gold is that throughout history gold has always held a constant value. This qualifies it as a preserver of wealth. It has never became worthless like paper currencies. In fact, every paper currency in history has eventually collapsed. There is much talk that the U.S. Dollar will soon follow the same tradition. Other countries who invest in the dollar are already running scared. None of them are buying Treasury Bonds like they had in the past. And guess where they are all moving their reserve currencies, into gold!

Independent Asset

One important characteristic about gold is that it's an asset class of its own. It can not be affected by economic conditions of any particular country, which means it can't be inflated or deflated. Paper currencies are the exact opposite. They are constantly being inflated and deflated. Governments can not control gold and that is why we no longer have the gold standard. With paper money the government can crank up the printing presses and completely manipulate the economy. But as we may soon see, they can only do it for so long!

Investment Hedge

The reason investors include gold in their portfolio is for a saftey net. It's a great hedge to help protect against the decline of their other investments. One thing about gold is when the stock market declines, gold shines. That inverse affect on the price of gold gives it the credibility to be the one investment to rely on when others lose value.

It's Rare

Probably the biggest reason gold remains so consistent in value is because it can not be produced. Even other commodities such as wheat or sugar can be created. Paper currencies can be printed. But there is no way to create gold out of thin air. And there is only so much gold that has every been mined, 165,000 metric tonnes to be exact. In its pure state it could all fit in a cube the size of a football field. This makes it the rarest of all commidities.

So, you no longer have to wonder, why buy gold. And when you invest a pile of your, "soon to be", worthless dollars into the shinny metal, you can be confident you haven't lost your marbles!

Street Talk

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